The end of 2010 and the start of the New Year offer some
challenges for those seeking to analyze and predict where
prices and demand might be heading for aluminum and steel scrap
destined to enter the can production stream.
Aluminum scrap tags were basically flat at the start of the
fourth quarter as many buyers held out for a clearer view on
demand for the next few months. Since scrap flow traditionally
slows at year-end, buyers must decide between speculating or
awaiting solid information on upcoming demand.
The same was true on the steel side, where scrap prices rose
slightly in November due to a buying spree by Turkey. Because
the increase didn't reflect any improvement in domestic mill
consumption, analysts are unsure how demand will start in the
Although secondary aluminum smelters are seeing scrap prices
tick higher, those changes are more reflective of London Metal
Exchange activity than any real change in demand, the Institute
of Scrap Recycling Industries said in a fall report.
"Consequently, smelters insist that they are not chasing this
market but prices are firmer," it said.
Longer term, the demand outlook might be improving, many
traders said. Manufacturing in the Midwest grew in the third
quarter as claims for unemployment benefits fell and consumer
spending showed some sign of recovery. Still, some offered a
"The recovery has been uneven across regions. The Midwest
might have been better at one point of the year and the
Northeast at another point. Some regions were slightly tighter
on supply earlier this year and are doing slightly better now,"
said Leslie Shuman, director of strategy and supply chain at
Alcoa North American Rolled Products, part of Pittsburgh-based
Yet there are signs of optimism for growing markets. Crown
Holdings Inc., Philadelphia, announced in the fall that it is
expanding its beverage can production capacity in Turkey by
building a new manufacturing plant in the Osmaniye region in
south-central Turkey vs. an existing two-line facility in
Izmit, adding about 1 billion two-piece aluminum cans per year
to its current annual Turkish output capacity of around 1.5
billion beverage cans.